Philippines Set to Edge Mexico for Remittance-Olympics Bronze

The Philippines’ globetrotting dream team of more than 8 million overseas workers is set to surpass team Mexico in the amount of money sent home—which would be the first time in 17 years.

The World Bank projects official remittances to the Philippines at just over $24 billion this year. That gives it a third-place bronze medal behind China and India, each projected to receive more than $65 billion, and just ahead of Mexico, whose migrant workers are projected to send home a bit under $24 billion.

Like its boxing sensation Manny Pacquiao, the Philippines punches way above its weight class. Its migrant workers remit close to 40% of what Indian and Chinese workers do, even though its population is less than 8% of those Asian titans’.

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Manny Pacquiao against Mexico’s Juan Manuel Marquez last year; outside the ring, the Philippines and Mexico are fighting it out for third place in global remittances.

The World Bank data, which take into account only formal recorded remittances, run back to 1979, and Mexican workers have sent more money home than Filipinos in every year but one: 1995.

Globally remittances to developing countries are expected to grow 6.5% this year to $406 billion. Next year that growth should accelerate to 8% and the following year to 10%. the bank said in a report this week.

“The true size of remittance flows, including unrecorded flows through formal and informal channels, is believed to be significantly larger,” said the World Bank’s “Migration and Development Brief” released this week. “Compared to private capital flows, remittance flows have shown remarkable resilience since the global financial crises.”

In tough times remittances are a much more reliable source of international income for developing countries than foreign direct investment, foreign portfolio investment or foreign aid. They can be particularly potent in helping those in need because remittances go directly to families, who usually spend more wisely than companies or governments.

Remittances “may be channeled by the family into investments such as houses, health, education, land and small enterprises,” Theresa Devasahayam of Singapore’s Institute of Southeast Asian Studies said in a recent report. “In the Philippines, it has been ascertained that much of the remittances are used to improve child schooling, increase educational spending and enable higher ownership of durable goods.”

While the Philippines and Mexico were the welterweight champs this year, remittance growth to both countries slowed. Filipinos were sending home less than they might have in 2012 as the strong peso gave them less bang for their bucks, while Mexican workers were sending less home than usual because fewer of them were going to the U.S. for work.

“The net flow of migrants from Mexico to the U.S. has come to a standstill,” said the World Bank report. “This may have happened due to tighter border controls and fewer construction jobs in the U.S.”

Of course, with more than a month still left in the year, Mexican workers could rally to pull ahead. Mexico and the Philippines are both Catholic countries with a lot of gift-giving during the Christmas season, so the end of the year is a big remittance period.

But the Philippines may have an unfair advantage there: Its people are so Christmas-crazy that they start celebrating in October.

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Indonesia Real Time provides analysis and insight into the region, which includes Singapore, Thailand, Indonesia, Vietnam, Malaysia, the Philippines, Myanmar, Cambodia, Laos and Brunei. Contact the editors at SEAsia@wsj.com.

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